Buy Colgate-Palmolive (India), target price Rs 1565: Axis Securities

Axis Securities has given a buy rating to Colgate-Palmolive with a target price of Rs 1565. The share price moved up by 1.56 per cent from its previous close of Rs 1432.15. The stock’s last traded price is Rs 1454.55.

Colgate-Palmolive (India) Ltd., incorporated in the year 1937, is a Large Cap company (having a market cap of Rs 39565.75 Crore) operating in FMCG sector.

Financials
For the quarter ended 30-09-2020, the company reported a Standalone sales of Rs 1277.66 Crore, up 23.61 % from last quarter Sales of Rs 1033.60 Crore and up 5.31 % from last year same quarter Sales of Rs 1213.21 Crore Company reported net profit after tax of Rs 274.19 Crore in latest quarter.


Investment Rationale
Management indicated all categories reported positive growth despite the uncertainty with toothpastes continuing its accelerated performance driven by strong brand fundamentals and household penetration. While the brokerage likes CLGT's business orientation of 'essential and stable', market leadership, strong parentage, robust margin profile and renewed aggression on volume growth with sustained focus on premiumization, it would keenly monitor the sustenance of this growth from a near to medium term perspective. It maintains BUY and TP of Rs.1,565 as it values the stock at 38x its FY23E EPS.

Promoter/FII Holdings
Promoters held 51 per cent stake in the company as of June 30, 2020, while FIIs held 15.3 per cent, DIIs 11.5 per cent and public and others 22.2 per cent.